Growing China is repaying the world

The reasons why Chinese investors find the US attractive are not only the rule of law, a well-trained workforce, advanced technologies and convenient energy supply, but also its huge consumption market. China's foreign exchange reserves have further boosted its overseas investment. As President Xi Jinping said at the Beijing APEC meeting last year, China's overseas investment will reach $1.25 trillion in 10 years, second only to the US'.

Moreover, the internationalization process of the yuan has been gaining pace. Since 2003, US politicians have been putting pressure on China for the yuan's appreciation to ease the trade imbalance. Yet the Chinese currency has appreciated at its own but steady pace. This shows China is confident of the yuan's internationalization process.

In fact, the yuan started becoming popular with neighboring countries and regions in the 1990s. Gradually, it started appealing to Western economies too. Today, offshore yuan reserves have reached 2 trillion yuan ($319.7 billion), while UnionPay cards of China's banks can be used in 142 countries and regions. Also, China has been making efforts to get the yuan into the Special Drawing Rights basket of the International Monetary Fund by 2020.

Nicknamed "paper gold", the currencies listed in the IMF basket are automatically included by the world's 220 economies in their foreign currency reserves. Up to now the basket has only four currencies - the US dollar, the euro, British pound and the Japanese yen. Every five years, the IMF deliberates which currencies to list in the basket and the yuan is the strongest candidate for the 2020 deliberation.

In its report, "Global Development Horizons 2011: Multipolarity - The New Global Economy", the World Bank has said the US dollar would lose dominance by 2025 and be replaced by a multinational currency system centered on the dollar, the euro and the yuan. China needs to take measures to ensure the World Bank's prediction comes true, so that Chinese nationals can travel anywhere in the world with a yuan account.

The author is a researcher at Center for US-China Relations, Tsinghua University.